Fitch Ratings downgrades the Rhode Island Economic Development Corporation's approximately $243 million in outstanding Rhode Island Airport Corporation (RIAC) senior lien general airport revenue bonds to BBB-plus from A-minus.
The rating outlook is revised to stable.
The downgrade reflects the airport's plans for additional senior lien parity debt borrowings, while the airport continues to struggle to reverse a prolonged period of traffic declines that continues into the current fiscal year.
Higher planned debt will lead to some elevation in overall leverage levels, and could have a modest impact to airline costs and coverage ratios at the current traffic base. Boston's Logan Airport's operational dominance and expanding service levels in the greater New England air trade service area exacerbates the challenge in the near term for RIAC to improve its market position.
The stable outlook reflects Fitch's expectations that the airport is nearing a base level of traffic that is sustainable and incorporates the current borrowing plan.